Effect of Consumer Price Index on Gold Prices

Gold prices experienced fluctuations during Wednesday’s trading session,
following their largest monthly decline in the previous session.
This was attributed to concerns regarding the rising inflation rate in the United States and its impact
on the Federal Reserve’s decisions to postpone interest rate cuts until after June.

Content:

Gold

Oil

Nikkei

Gold:

The price of gold fell by 1.1% on Tuesday after data showed a strong increase in U.S. consumer prices in February,
surpassing expectations and indicating stable inflation.
This marked the largest single-day decline in gold since February 13 when data revealed consumer prices rising higher than expected in January.

The U.S. Bureau of Labor Statistics reported that the Consumer Price Index rose by 0.4% on a monthly basis and 3.2% on an annual basis in February.
While the monthly increase aligned with expectations, the annual rate exceeded estimates, which anticipated a 3.1% increase.

Oil:

Rising Oil Prices Following Increased U.S. Demand:

Oil prices recorded an increase on Wednesday due to expectations of a global increase in crude demand,
including from the United States as the world’s largest oil consumer.
This was attributed to stable inflation expectations in the United States and the possibility of the Federal Reserve soon reducing interest rates.

Brent crude futures for May delivery rose by 36 cents or 0.44% to $82.28 per barrel.
West Texas Intermediate crude futures for April delivery increased by 38 cents or 0.49% to $77.94.

The Organization of the Petroleum Exporting Countries (OPEC) confirmed its strong expectations for global oil demand,
projecting a daily increase of 2.25 million barrels in 2024 and 1.85 million barrels in 2025. OPEC also raised its economic growth forecast for this year.

Despite a strong increase in consumer prices in the United States in February due to higher gasoline and housing costs,
there is a belief that the U.S. Federal Reserve may start reducing interest rates in the summer, indicating some stability in inflation.
The decline in interest rates boosts demand for oil.

Nikkei:

Continued Decline in the Japanese Nikkei Index

The Japanese Nikkei index declined for the third consecutive session on Wednesday as investors exercised caution regarding potential changes in monetary policy during the upcoming Bank of Japan meeting next week.

The Nikkei index recorded a 0.26% decrease, closing at 38,695.97 points, retracting shortly after surpassing the psychological support level at 39,000 points.

The broader Topix index also closed lower by 0.33% at 2,648.51 points.

Caution prevailed in the market ahead of the Bank of Japan’s monetary policy meeting, with many expecting the central bank to raise short-term interest rates from the negative zone, either next week or by April.

Effect of Consumer Price Index on Gold Prices

Effect of Consumer Price Index on Gold Prices

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